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Music rocks cloud computing debate

EXCLUSIVE: A Commission departmental dispute over copyright licencing is responsible for the delayed publication of the EU strategy on cloud computing, EurActiv has learned.

A recent draft of the paper, seen by EurActiv, refers to the difficulty and cost of licencing digital content – such as music and streamed broadcast entertainment – on a multinational basis.

The draft says that the Commission’s proposal for a directive on collective rights management, published in July, will facilitate such agreements for on-line music, a move resisted by the powerful European collecting societies that wish to preserve the rights to licence by individual territory.

Directorates at loggerheads

EurActiv understands that the draft, originally intended to be published before the summer break, has been subject to rigorous debate within the Commission's directorates, between the Internal Market and Services Directorate (DG Markt), responsible for publishing the draft directive, and the Communications Networks, Content and Technology Directorate (DG Connect), which will be responsible for the cloud strategy paper.

The draft directive proposes simplifying management and multiterritorial licencing of rights in musical works for online uses, but the issue is complex and it is not known how much territorial control the collecting societies might retain when the directive is published, possibly later this year.

Copyright levies administered by collecting societies are imposed on music and content downloads onto devices with memory, such as memory sticks, mobile phones and laptops.

Cloud computing poses a crucial problem: since there is no limit to memory capacity, levies cannot easily be applied.

“The collecting societies want copyright to apply in the cloud the way it does elsewhere,” said Kostas Rossoglou, senior legal advisor at the European consumer organisation BEUC.

“DG Markt is more in favour of that argument. It’s very controversial and one of the reasons why the paper has been delayed from earlier this year,” Rossoglou said.

An IT analyst in Brussels told EurActiv on condition of anonymity that DG Markt officials were unhappy with the suggestion in the draft cloud strategy that DG Connect would take on the role of cheerleading to break open the territorial licencing of the collecting societies.

Copyright concerns

John Higgins, director-general of DigitalEurope, an industry association, said: “We’re looking forward to giving [the cloud strategy] our full support but we will want to see that it addresses those copyright issues that a cloud model shines a light on and makes more obvious; issues like how best to reward creators and how to let users buy once and use anywhere.”

A Commission spokesman confirmed that the cloud strategy would be published later this month, but declined to comment on the details.

Positions:

“DG Markt is already exaggerating the likely impact of the proposal issued in June, for which they are responsible, and appear uncomfortable with the strategy document creating further pressure on the situation,” said Kostas Rossoglou, senior legal advisor at the European consumer organisation BEUC.

“At BEUC we do not believe that the proposals or the strategy are likely to go far enough, since what is needed is an unblocking of the requirement to obtain rights individually within all 27 of the member states, and there is no indication that the strategy or any proposed directive will actually affect that,” Rossoglou said.

“With the economy in dire straits, we should remind ourselves what is at stake and focus on getting a Europe-wide policy framework in place that drives cloud innovation and uptake sooner rather than later. The cloud`s potential to boost competitiveness, growth and jobs in Europe is simply too large to ignore,” said Mark Lange, senior policy counsel at Microsoft Europe.

“Cloud services can bring big benefits to Europe; lowering the cost of public services’ IT, giving businesses quicker and cheaper access to IT capability and accelerating the growth of Europe’s tech SMEs. The cloud strategy paper is an important step to realising these benefits,” John Higgins the director-general of DigitalEurope, an industry association.

Timeline:

19 September 2012: European Commission to release its strategy on cloud computing.

Background

Cloud computing describes a whole range of infrastructure, software, data or applications residing in the cloud – that is to say, off your own premises and accessed via the Internet.

A study carried out by the University of Milan, published in late 2010, estimated that cloud computing has the potential to create 1.5 million new jobs in Europe over the next five years.

While businesses and governments wax lyrical about the benefits of cloud computing, EU regulators have been more wary, as further use of cloud systems would mean a large swathe of public and commercial data would migrate to servers possibly located outside national borders or even on other continents.

Meanwhile the issue of how copyright issues are dealt with in the cloud challenges the business models of the Europe’s powerful collecting societies which licence music use within strict territorial boundaries.